Published: Wednesday, July 3, 2013 at 3:30 a.m.

Last Modified: Tuesday, July 2, 2013 at 11:59 p.m.

Belle Foods, which operates four supermarkets in Tuscaloosa under the Belle Foods and Food World names, filed for bankruptcy reorganization Monday.

This makes the third bankruptcy reorganization for the Birmingham-based grocery store chain in the past 15 years. Belle Foods, formerly known as Bruno’s, had different owners in each reorganization.

Under bankruptcy reorganization, businesses typically try to continue operations. In the Belle Foods situation, however, it is unclear whether the stores will remain open.

That’s not to say changes won’t occur. Earlier this year, the company reduced the weekly hours of many of its employees, including some of those in the Tuscaloosa stores. In its filing for Chapter 11 bankruptcy Monday, it said about 66 percent of 2,850 employees in four Southeastern states are now part-time.

additional comment on the filing and what it will mean in Tuscaloosa, were not returned.

In its filing, Belle Foods cited a deterioration of its business and an inability to access adequate cash flow.

The company also said technical problems with its accounting system last year led to losses, and it cited problems with its lenders and higher payroll taxes this year that added to its financial woes.

The company “has also seen an increased amount of competition in several of its markets from other grocers. With older locations, (Belle Foods) has had difficulty competing with the newer grocery stores that have moved into its markets,” it said in its filing in the U.S. Bankruptcy Court for the Northern District of Alabama.

The company said it owes about $8 million to unsecured creditors. Its 20 largest creditors included mostly food and beverage companies. But it said it owes another $5.1 million in accounts payable to C&S Wholesale Grocers, which sold what then was Bruno Supermarkets LLC to the Whites in December 2011. Belle Foods also owes C&S $900,000 on a pension withdrawal liability note.

But its largest debt is two secured loans for about $28 million from Southern Family Markets LLC, which is owned by C&S. Those debts are for a term loan of about $4 million and a revolving line of credit of about $24 million.

In bankruptcy court, secured loans have priority over unsecured loans when it comes to repayment.

Southern Family Markets sold the Bruno’s chain in December 2011 to the then newly created Belle Foods LLC, which is owned by the Whites and two trusts set up for their family members. The terms of that sale are private and have not been made public.

Belle Foods operates 57 stores in Alabama, Florida, Georgia and Mississippi. It said in its filing that it has more than 2,850 employees, of which 2,141 are covered by union contracts.

Bruno’s was once one of the largest supermarket chains in the Southeast and the dominant supermarket chain in Alabama. It was a publicly traded stock company run by members of the Bruno’s family of Birmingham.

In 1995, the firm was sold in a leveraged buyout to the Wall Street investment group of Kohlberg Kravis Roberts, or KKR. That investment proved to be one of KKR’s disappointments.

In 1998, Bruno’s filed for its first bankruptcy reorganization. It emerged from the reorganization in 2000, and in 2001, KKR sold Bruno’s to Royal Ahold, an international Dutch company. Royal Ahold sold Bruno’s four years later to the Texas private investment group, Lone Star Funds.

Lone Star sold some of the stores, and in 2009, it put the rest of the stores, then operating as Bruno’s Supermarkets LLC, into its second bankruptcy reorganization.

C&S Wholesale Grocers acquired the remaining Bruno’s Supermarkets LLC stores. In 2011, Belle Foods was formed by the Whites to buy the stores from C&S.

<p>Belle Foods, which operates four supermarkets in Tuscaloosa under the Belle Foods and Food World names, filed for bankruptcy reorganization Monday.</p><p>This makes the third bankruptcy reorganization for the Birmingham-based grocery store chain in the past 15 years. Belle Foods, formerly known as Bruno's, had different owners in each reorganization.</p><p>Under bankruptcy reorganization, businesses typically try to continue operations. In the Belle Foods situation, however, it is unclear whether the stores will remain open.</p><p>That's not to say changes won't occur. Earlier this year, the company reduced the weekly hours of many of its employees, including some of those in the Tuscaloosa stores. In its filing for Chapter 11 bankruptcy Monday, it said about 66 percent of 2,850 employees in four Southeastern states are now part-time.</p><p>Calls on Tuesday to Belle Foods' owners, Bill White and his son, Jeff White, seeking </p><p>additional comment on the filing and what it will mean in Tuscaloosa, were not returned.</p><p>In its filing, Belle Foods cited a deterioration of its business and an inability to access adequate cash flow.</p><p>The company also said technical problems with its accounting system last year led to losses, and it cited problems with its lenders and higher payroll taxes this year that added to its financial woes.</p><p>The company “has also seen an increased amount of competition in several of its markets from other grocers. With older locations, (Belle Foods) has had difficulty competing with the newer grocery stores that have moved into its markets,” it said in its filing in the U.S. Bankruptcy Court for the Northern District of Alabama.</p><p>The company said it owes about $8 million to unsecured creditors. Its 20 largest creditors included mostly food and beverage companies. But it said it owes another $5.1 million in accounts payable to C&S Wholesale Grocers, which sold what then was Bruno Supermarkets LLC to the Whites in December 2011. Belle Foods also owes C&S $900,000 on a pension withdrawal liability note.</p><p>But its largest debt is two secured loans for about $28 million from Southern Family Markets LLC, which is owned by C&S. Those debts are for a term loan of about $4 million and a revolving line of credit of about $24 million.</p><p>In bankruptcy court, secured loans have priority over unsecured loans when it comes to repayment.</p><p>Southern Family Markets sold the Bruno's chain in December 2011 to the then newly created Belle Foods LLC, which is owned by the Whites and two trusts set up for their family members. The terms of that sale are private and have not been made public.</p><p>Belle Foods operates 57 stores in Alabama, Florida, Georgia and Mississippi. It said in its filing that it has more than 2,850 employees, of which 2,141 are covered by union contracts.</p><p>Bruno's was once one of the largest supermarket chains in the Southeast and the dominant supermarket chain in Alabama. It was a publicly traded stock company run by members of the Bruno's family of Birmingham.</p><p>In 1995, the firm was sold in a leveraged buyout to the Wall Street investment group of Kohlberg Kravis Roberts, or KKR. That investment proved to be one of KKR's disappointments.</p><p>In 1998, Bruno's filed for its first bankruptcy reorganization. It emerged from the reorganization in 2000, and in 2001, KKR sold Bruno's to Royal Ahold, an international Dutch company. Royal Ahold sold Bruno's four years later to the Texas private investment group, Lone Star Funds.</p><p>Lone Star sold some of the stores, and in 2009, it put the rest of the stores, then operating as Bruno's Supermarkets LLC, into its second bankruptcy reorganization. </p><p>C&S Wholesale Grocers acquired the remaining Bruno's Supermarkets LLC stores. In 2011, Belle Foods was formed by the Whites to buy the stores from C&S.</p><p>Bruno's was founded in 1932.</p>